Portugal and Brazil depress Cimpor’s results

08 April 2005

Turnover at Cimpor edged ahead by 0.3 per cent to €1,365.6m in 2004 on a global cement volume 1.9 per cent higher at 18.64Mt. The operating profit at the EBITDA level, however, declined by 10.5 per cent to €458.7m, but thanks to a reduction in net financial charges from €35.5m to €6.5m, the running profit fell by just 4.6 per cent to €241.7m. The gearing level, however, remained high at €1,229.4m, at which level it corresponds to 126.7 per cent of shareholders’ funds. In the downstream operations, Cimpor’s ready-mixed concrete deliveries rose by 10.0 per cent to 6.67mm3, while shipments of aggregates were 4.0 per cent lower at 11.90Mt and the dry mortar volume rose by 11.9 per cent to 0.49Mt.

Portuguese construction activity continued to decline last year and the group’s turnover in Portugal fell by 8.2 per cent to €509.5m with the EBITDA dropping by 16.4 per cent to €175.7m. Domestic deliveries of cement declined by 6.3 per cent , but overall cement and clinker shipments from the Portuguese plants were 1.4 per cent higher at 5.95Mt, thanks to higher exports. The increased export volumes went principally to the group’s operations in neighbouring Spain. Ready-mixed concrete deliveries declined by 1.9 per cent to 3.65mm3, while aggregates shipments dropped by 12.4 per cent to 7.61Mt.

Last year, Spain established itself as the second largest source of profits as the EBITDA rose by 5.3 per cent to €88.7m on a turnover 15.0 per cent higher at €344.1m. The reduction in margins largely reflects the acquisition of additional downstream operations, particularly in ready-mixed concrete. While cement deliveries in Spain rose by 12.5 per cent to 4.21Mt and aggregates shipments were 10.4% higher at 3.87Mt, the ready-mixed concrete volume jumped by 32.6 per cent to 2.53mm3.

Brazil saw its share of group profits fall from 22.5 per cent in 2003 to 17.5 per cent last year as the EBITDA dropped by 30.4 per cent to €80.4m on a turnover 10.9 per cent lower at €199.1m. Cement deliveries were in fact 6.2 per cent higher at 3.44Mt, but cement prices were down by almost 15 per cent. While Cimpor’s EBITDA margin came down from 51.7 per cent in 2003, then the highest in the group by some margin, it remains comfortably above the group average of 33.6 per cent at 40.4 per cent.